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Kazakhstani Parliament ratifies deal on Kazakhstan-China pipeline

The Kazakhstani Parliament ratified on Thursday the agreement between Kazakhstani and Chinese governments on developing and exploiting Kazakhstan-China oil pipeline.

The agreement describes mechanisms and terms of implementation of the project of development and exploitation of the Kazakhstan- China oil pipeline aimed at increasing its capacity.

At a plenary meeting of the Parliament, it was mentioned that investments and capital expenditures will make around 126 billion tenge (840 million US dollars).

“The agreement is mainly aimed at setting a uniform network rate independent of the point of oil’s entry into the Kazakhstan- China pipeline system. The oil supply rate will be approved by the competent state authorities of Kazakhstan and should not exceed the set oil export rate,” said Kazakhstan Oil and Gas Minister Uzakbai Karabalin.

According to the minister, the prices in the oil sales contracts will be set based on international oil prices in oil/ barrel and will be the same at the Kazakhstan-Chinese border.

“The Chinese partners will be making sure that these prices are attractive for Kazakhstani dispatchers for the whole period of this agreement,” Karabalin said.

The plan is to increase the pipeline’s capacity in Atassu- Alashankow section to 20 million tons per year in 2013, he said, adding that the general plan is to create 400 permanent jobs and up to 2,000 jobs for the first two years of construction.

“Exploitation and maintenance of all the parts of the Kazakhstan-China pipeline are currently being performed and will be performed by KazTransOil,” the minister noted.

Earlier, Kairgeldy Kabyldin, director general of KazTransOil, assured that there would be as few foreign workers at the Kazakhstan-China oil pipeline as possible.

Currently, China’s share in the production of oil is 24 percent, but Chinese companies are mostly on deposits in the Kyzyl-Orda and Atyrau oblasts, where year-on-year oil production decreases.

Therefore, China’s share in the future of Kazakhstan’s oil production will be reduced to 7-8 percent, said the minister.

At present, investments from the United States in this area accounts for 25 percent, the most among foreign countries.